Although major greenhouse-gas emitting countries were criticized at the latest round of climate negotiations in Doha for failing to show enough ambition, an event held during the second week highlighted leadership from Germany, China, Morocco, and South Africa on clean and renewable energy. Hosted by Peter Altmaier, Federal Environment Minister of Germany, and moderated by the President of the World Resources Institute, Andrew Steer, the panel also included Xie Zhenhua, Vice-Chair of China’s NDRC, Nandi Mayathula Khoza, Minister of Agriculture of South Africa’s Gauteng province, and Fouad Douiri, Morocco’s Energy and Environment Minister.

At first glance, the mix of countries featured at the high-level event is both surprising and unsurprising. Germany is known for being a global leader in renewable energy. Last year it reduced CO2 emissions 2.4 percent from 2010 levels, and this year boosted the amount of electricity generated from renewable sources from 20 to 25 percent in the first six months. The move away from nuclear power generation following the Fukushima-Daichi disaster has certainly accelerated Germany’s push for having a greater share of its electricity generated from renewable sources; however, this impetus has been matched by leadership from senior officials to maintain Germany’s status as a clean-energy front-runner.

“We organized this event to explain that we are not alone in the universe,” Minister Altmaier said. “What is not so well-known is that many countries around the world have similar efforts and ideas and a lot has been achieved over the last couple of years.”

Included in this group of countries is China, which opened the side event with prominent mention of its recent achievements with respect to increasing consumption of non-fossil energy. Minister Xie touted the rise of non-fossil sources in China’s energy consumption to 8.1 percent in 2011 and 27.7 percent of installed power generating capacity using non-fossil sources, among other figures. While Germany may surpass China in terms of installed solar capacity, China led the world last year in constructing on-grid wind power capacity, with an increase of 16 million kW and generating 80 billion kWh. Many of these statistics came from China’s recent Climate Change White Paper, which was released in advance of the Doha meetings.

Minister Xie also mentioned the development of low-carbon growth models in five provinces and eight cities across China, which he stressed is challenging given the “uneven economic development” amongst provinces. He even referenced the application of the principle of Common but Differentiated Responsibilities to allocate differential low-carbon targets to these various models – a comment that brought some levity to one of the most contentious issues between developing and developed countries in Doha.

Morocco designs to become net exporter of clean energy

Perhaps the most surprising case of the evening came from Morocco’s Minister Douiri, who announced that his country is striving to become a net exporter of clean energy. This goal is challenging, considering Morocco currently spends about US$11 million (11 percent of the country’s GDP) to import around 95 percent of its primary energy. From an energy strategy issued in 2009, Morocco’s goal is to have 42 percent of its installed generation capacity by 2020 come from renewable sources. 2,000 megawatts will come from solar; 2,000 megawatts from wind, and more than 2,000 megawatts from hydro. Minister Douiri expects that they will be able to avoid 10 million tonnes of CO2. To place these goals into perspective, in 2009 only 4.9 percent of its total energy supply was renewable.

While Minister Douiri did not provide full details as to how the country aims to achieve these goals, he did mention strong support from E.U. partners France and Germany, as well as integration into regional markets that will allow Morocco to export its energy to cover some of the costs. Such efforts were praised by WRI President Andrew Steer, who said that Morocco’s clean energy generation costs are 10 cents per kWh less than what was being predicted a year ago.

“You’re driving down costs, generating 60,000 jobs, and on the way to becoming a major exporter of clean energy,” Steer added.

South Africa challenges itself to reduce reliance on coal

Such a model – if successful – could have lessons for South Africa, which arguably has the most challenges ahead in terms of sustainable energy generation. South Africa has the 14th-highest GHG emissions in the world and one of the most energy-intensive economies due its reliance on mining and minerals processing, as well as coal-intensive electricity generation. According to the International Energy Association, over 90 percent of the South African electricity supply comes from coal, compared to around 65 percent in China and 42 percent in the United States. Therefore, South Africa has more ground to cover, although Minister Khoza did state the country’s goal for 42 percent renewable electricity generation by 2030, reducing the coal-based portion to 15 percent. A mix of public and private funds will help to achieve goals of installing 1 million solar water heaters by 2015 (to date, over 300,000 have been installed); as well as the Khi Solar One Project, which will generate 50 MW of power and create 1,400 jobs.

While South Africa’s commitment was palpable through the words of Minister Khoza and the fact the country hosted last year’s climate summit in Durban, there is no doubt that it will be difficult for the country to meet these goals. In the 2012 Environmental Performance Index, South Africa ranked last amongst countries in Sub-Saharan Africa, in large part due to its poor performance on climate change indicators and renewable electricity generation. Unemployment rates in the country are also at a staggering 25 percent, which is why Morocco’s model of clean energy job creation is particularly relevant for South Africa.

Meeting challenges through teamwork - a Renewable Energy Club?

These evident linkages between the countries present at the event are the foundation for a “renewable energy club,” as Minister Altmaeir dubbed it in the conclusion of his remarks.

“At least 118 countries worldwide have national targets for renewables,” he said. But there are very real challenges to achieving these goals, including how to reduce the costs of integration and installation, how to make investments in renewable energy more attractive worldwide, and how to give a competitive advantage to countries in a “club” for countries like those present on the panel that are proactive and demonstrate leadership. Such a club could foster much-needed alliances in “political and financial power,” in Altmaeir’s words, as well as sharing of concrete tools and strategies. His vision would include annual meetings of club member countries, in parallel fashion to the UN climate negotiations, which are often mired in nuanced technical and legal discussions, as was the case in Doha.

It was refreshing to see a diverse range of countries who are at various points in their sustainable energy trajectories discuss in Doha not only their current actions, but also future plans to tackle climate change through renewable energy. While the Doha talks were not expected to and did not result in much game-changing action, perhaps this idea of a “renewable energy club” for countries will gain traction and be a viable platform by which major emitters can raise the much-needed ambition to combat climate change.

“This event illustrates a potentially game-changing trend: leaders who are impatient with the formal processes forming alliances with others who want to act rather than talk,” reflected Steer. “This is a hugely encouraging development, and one that can in turn, by demonstrating that success is possible, encourage more ambition in the formal negotiating process.”

On December 5, as part of the Yale Center for Environmental Law and Policy’s ongoing webinar series on Emerging Issues in Shale Gas Development, Florida State Law Professor Hannah Wiseman provided a comprehensive overview of the current legal regimes governing shale gas development, including state and federal statutes, local zoning, agency directives, and the common law.

While shale gas is currently regulated at each of these levels, Professor Wiseman emphasized that states are the central hub in this process because states typically issue the primary permits required to develop shale resources. A significant issue, which Professor Wiseman referred to as the “elephant in the room,” is whether the federal government or the states should take the lead in regulating hydraulic fracturing. (And what the role of local governments should be.) Ultimately, Professor Wiseman suggested that states should continue to play a major role, but she believes that efforts are needed to improve and, to at least some extent, standardize current state regulations.

In her presentation, Professor Wiseman addressed regulatory issues at each phase of the shale gas development process, including regulation of seismic testing, development of access roads and drilling sites, drilling and casing of wells, storage and disposal of drilling waste, water withdrawal, hydraulic fracturing, flowback water, and gas venting and flaring.

This blog focuses on a few regulatory issues that Professor Wiseman discussed in the context of well drilling and casing and hydraulic fracturing. Professor Wiseman’s presentation slides and a recording of her full presentation on "Understanding and Improving Regulation of Shale Gas Development" are available here and here, respectively.

Regulating at the Drilling Stage: Well Casings and Groundwater Contamination

Preventing groundwater contamination is a high priority in shale gas regulation and requires, among other things, effective standards for well casings. In fact, Professor Wiseman noted that one of the most contentious issues that has arisen in shale gas development—the potential for methane contamination of drinking water—is primarily an issue of well drilling and casing rather than of hydraulic fracturing. (Though the term hydraulic fracturing or “fracking” is sometimes used imprecisely to refer to all stages of shale gas development, hydraulic fracturing is but one stage in the process.)

In regulating groundwater pollution from faulty well casings, Professor Wiseman noted that it is crucial to obtain baseline data. If shale gas wells are improperly drilled and cased, groundwater can be contaminated by methane and other pollutants, such as iron, manganese, and dissolved ethane. However, because some groundwater sources have naturally elevated levels of these substances, elevated levels alone are not conclusive evidence of well-related pollution. To address this issue, several states have begun to require water testing both pre- and post-drilling to verify whether well-related contamination of groundwater has occurred.

Due to the so-called “Halliburton Loophole,” which exempts hydraulic fracturing from the federal Safe Drinking Water Act (exept where drillers inject diesel fuel), states are now almost entirely responsible for addressing drilling and fracturing-related groundwater pollution, such as by ensuring that wells are properly cased and cemented. Some states have filled this gap by regulating the types of casing materials that can be used, requiring bond logs, specifying minimum pressures that casings must be able to withstand, setting lengths of time that casings must set before wells can be used, and establishing minimum depths that casings must extend below groundwater.

One regulatory dilemma that Professor Wiseman highlighted is that many states currently apply only narrative standards to shale gas activities. While narrative standards may, on their face, require that certain environmental goals be met (e.g., no leakage from well casings), such standards do not prescribe specific measures (or technologies) to meet their goals, and this lack of implementation guidance can sometimes be problematic for regulators, who must issue permits and assess compliance.

Regulating at the Fracturing Stage: Surface Spills, Air Pollution, and Blowouts

At the hydraulic fracturing stage, one issue that has received considerable public attention is whether or not operators should be required to disclose the chemicals they use during the fracturing process. Professor Wiseman noted that while most states require some type of information disclosure, many do not require full disclosure if drillers consider the chemicals that they use to be “trade secrets.” These limitations create uncertainty about the composition of fracturing fluids, which raises concerns about the full risks of groundwater contamination. Lack of disclosure may also hamper efforts to address surface spills when they occur.

Surface spills are an inherent risk during both the drilling and fracturing phases of shale gas development due to the machinery and chemicals used and stored at the drilling site and the contaminated flowback water produced after fracturing. A variety of spill response laws apply here, including, Professor Wiseman noted, the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) which kicks in if sufficient levels of non-diesel and non-gas contaminants are spilled. But effective prevention of surface spills and, when spills do occur, limitation of their harms also requires pre-drilling measures, such as mandated drilling setbacks from sensitive natural resources. As a precursor to development, some states also require development of spill prevention and control plans and/or mandate that operators obtain environmental pollution coverage in the form of insurance or bonds.

In addition to water quality concerns, well fracturing and subsequent gas production can lead to issues of air pollution. As recently discussed on this blog, states have adopted air quality regulations of varying stringencies. At the federal level, the U.S. EPA also recently issued regulations under the Clean Air Act, which will limit the release of volatile organic compounds.

Two relatively rare but critical risks during the fracturing stage are well explosions and high-pressure emissions of fluids from equipment accidently left open at the surface. To avoid such problems, many states require installation of blowout equipment at well sites, which allows pressure to be controlled and released when necessary.

To learn more about these and other shale gas regulatory issues, you can download Professor Wiseman’s presentation slides here, and view the recording of her webinar here:

Harvey and Phyllis Karan are lucky that their beachfront home on the Jersey shore suffered little damage from Hurricane Sandy. Not long before Sandy hit, the Army Corps of Engineers completed a dune replenishment project, raising a dune in front of their home and providing protection from the storm surges that devastated much of the coast only one month ago.

In its aftermath, Sandy has sparked discussions about how communities along the Atlantic coast can prepare for the more frequent and more intense storms that may result from climate change. Experts have recommended constructing a sea wall to protect New York City at a cost of perhaps $6 billion, for example. Dune replenishment is a more modest effort to reduce the impacts of major storms.

But, the Karans’ situation demonstrates that even modest efforts to prepare for climate change may be no match for the nuances of property law.

When the Army Corps raised the dunes in front of their home, the Karans lost some of their spectacular view of the Atlantic and a small strip of land on which the new dune was constructed. Because this was a government project on private land, the government was required to pay the Karans compensation for the negative impact that the dune raising had on their property. The government offered $300 the Karans demanded $500,000.

Back when this disagreement arose, nobody predicted that Sandy would cause the devastation that it did, though all of the parties knew that improved dunes would protect beachfront property. To that end, the government argued that any harm to the Karans should be balanced against any benefit (i.e., storm protection) that they would get from the more robust dunes. Regrettably, property law does not account for even the house-saving benefits that the government provided the Karans.

Courts recognize two types of benefits that a landowner might receive from a government project like dune replenishment: (1) general benefits and (2) specific benefits. General benefits are those that the public at-large can enjoy. Specific benefits are those that are unique to only a single landowner. Specific benefits must be unique both in their degree and their nature.

For example, if the government builds a road across a landowner’s property, the public at-large may benefit from faster travel. The landowner herself, who is now very close to the new road, might benefit even more from quick access due to her proximity, but the nature of her benefit—faster travel—is the same for this landowner, her neighbors, and other travellers. In this example, the landowner’s added benefit is unique in degree but not in nature, and is thus a general rather than a specific benefit. Under property law, the government cannot subtract the landowner’s general benefit from the compensation it owes her for taking a portion of her property. On the other hand, if the government needed to drain a swamp to build the road, and by draining the swamp it made the landowner’s remaining land newly arable, then that landowner would also experience aspecific benefit, unique in its nature only to her. In this case the government could subtract the specific benefit of the new farmland from its compensation payment.

In the case of the Karans, the couple clearly benefitted from the dune project, which protected their home from Sandy’s damage. But protecting beachfront property from storm damage was exactly the general benefit that the government intended. Even if the Karans received a larger benefit than homes further inland, that difference is merely a difference of degree; it is not a specific benefit of a different nature.

When Sandy ravaged the Jersey coast, the Karans undoubtedly enjoyed an immense benefit insofar as their home is still standing and largely undamaged, but that is an advantage that the courts could not consider in this case. As such, the Karans benefit twice and get a windfall. The government has saved the Karans’ home and (if a pending jury award is upheld by the New Jersey Supreme Court), it must also pay the Karans hundreds of thousands of dollars for the privilege of saving their home.

Looking at the Karans alone, this legal doctrine seems unfair and no doubt terribly frustrating to those flooded by Sandy’s water rather than the govnerment’s money.

Looking at the problem more broadly, the limitations of property law could pose an insurmountably costly barrier to large-scale climate adaptation. At the scale of this particular dune replenishment project alone, 190 homeowners, including the Karans, received newly replenished dunes. If each of these homeowners received $375,000, the amount awarded to the Karans, the local government would need to pay an extra $71 millionover and above the millions of dollars needed to carry out the engineering and completion of the dune project itself. On the scale of the entire Atlantic and Gulf coasts (just two of many vulnerable areas), financing adaptation could quickly become untenable under the strictures of property law.

Yale Law Professor (and Interim Director of the Yale Center for Environmental Law and Policy) Doug Kysar recently authored an article titled “What Climate Change Can Do About Tort Law,” in which he argued that tort law, which so far has failed to address the massive threat of climate change, must evolve to account for the human demand for a legal framework and venue that addresses climate harms.

Before Hurricane Sandy, the Karans’ story may not have seemed so astonishing. But now, post Sandy, with the threat of climate-instigated property destruction more obvious than ever, the limits of property law have been laid bare. The legal doctrine that entitles this couple to hundreds of thousands of dollars seems increasingly inappropriate in a changing climate world.

With the Karans’ legal case now in front of the New Jersey Supreme Court, it may be time for jurists to think about what climate change can do about property law.

**UPDATE**

On December 11, 2012 CBS Evening News ran the following piece on the dune projects along the New Jersey coast.

On Wednesday, December 5, from 3-4pm EST, Florida State University Law Professor Hannah Wiseman will present a webinar on “Understanding and Improving Regulation of Shale Gas Development” as part of the Yale Center for Environmental Law and Policy’s ongoing Policy Workshop Webinar Series on “Emerging Issues in Shale Gas Development.”

Please click here to register to participate in this free online event.

As a lead-in to Professor Wiseman’s webinar, this blog focuses on one key area of environmental regulation—the regulation of air pollution from shale gas development—at both the state and federal levels. As Yale Professor of Hydrology Jim Saiers discussed in the Center’s first shale gas webinar earlier this fall, air pollution is one of many potential environmental concerns associated with shale gas development. Shale gas drilling can impact air quality and human health in several ways, including through the release of methane (the principle component of natural gas), which contributes to climate change; nitrogen oxides (NOx) and volatile organic compounds (VOCs), which can lead to both ground-level ozone and particulate matter (PM), which are in turn linked to heart attacks and respiratory morbidity; carbon monoxide; and hazardous air pollutants, such as benzene. This blog looks at the sources of these air pollutants and regulatory steps that states and the U.S. EPA have taken to limit this type of pollution.

Shale Gas Development and Air Pollution

In February, the National Oceanographic and Atmospheric Administration (NOAA) reported research suggesting that air pollution from natural gas operations in Colorado is much higher than previously understood. While this research is from one area only, and applies to natural gas operations in general rather than shale gas specifically, it raises concerns about the potential air pollution that could occur locally and globally as a result of the shale gas boom.

Air pollution can occur at many stages in the shale gas supply chain, from gas production to transportation, distribution, and use. At the production stage, shale gas wells can “leak” methane and VOCs into the atmosphere during the period between well drilling and hydraulic fracturing and the point at which newly drilled wells are connected to gas collection, processing, and compression equipment and pipelines. While “green completion” technology can be used to capture all or most of this methane and other gases, and thus avoid air pollution, this technology is not always used. In the absence of green completions, gas capture may be delayed until after the initial “flowback” and “produced” water flows out of the well.[1]

In some cases, methane and other gases leaking from newly-fracked wells are burned or “flared.” Flaring converts the gas into less harmful substances, such as carbon dioxide (CO2). In other instances, methane and other well gases are simply “vented,” unchanged, into the atmosphere. Because methane is a much more potent greenhouse gas than CO2, flaring is better for the climate than venting. That being said, flaring is by no means a perfect solution since it still generates climate-polluting CO2, NOx, and other air pollutants.

Methane can also be released at other points in the natural gas supply chain, including from leaks in the pipelines used to transport the gas to market and from local gas distribution lines, as the New York Times recently reported. Dr. Ramon Alvarez from the Environmental Defense Fund discussed these methane leakage issues last month in the second installment of our webinar series. You can read a summary of Dr. Alvarez’s presentation and also view an archived recording of his webinar here.

Beyond methane leakage, other sources of air pollution associated with shale gas development include emissions from the machinery used to drill wells and transport gas and, where gas is used for energy, from the eventual combustion of this gas itself. For example, shale gas drilling involves a significant number of trucks (generally diesel) and other equipment. The internal combustion engines in these trucks, well-drilling machinery, and gas compressors produce air pollution in the form of CO2, NOx, and PM. When natural gas is combusted to generate heat or electricity, it also releases CO2. And while the CO2 emissions from natural gas are lower on a per-unit energy basis than other fossil fuels—e.g., coal and petroleum—the CO2 released during gas combustion still contributes to global warming at non-negligible levels.

Regulating Shale Gas Impacts on Air Quality

While some amount of air pollution from shale gas development is likely inevitable, the types and scales of these environmental impacts can be reduced through regulatory safeguards.

In their paper, “Regulation of Shale Gas Development, Including Hydraulic Fracturing,” Professor Wiseman and her co-author Francis Gradijan discuss current federal and state air quality regulations that aim to reduce this pollution. On the federal side, the EPA has established National Ambient Air Quality Standards (NAAQS) under the Clean Air Act for “criteria pollutants” (pollutants that are common throughout the U.S.) and technology-based standards for “hazardous air pollutants” (pollutants that are toxic or hazardous to humans).

Shale gas development produces both criteria and hazardous air pollutants. Yet Professor Wiseman notes that because the Clean Air Act focuses primarily on “major” sources, many EPA regulations do not apply to shale gas wells, which, while potentially cumulatively significant, generally do not individually emit sufficient quantities of pollutants to qualify as major sources. Professor Wiseman notes that the EPA may soon redefine its methodology for calculating major sources in a way that could bring more shale gas (and other natural gas) sites within the scope of its regulations although this step has not yet occurred.

There are, however, some situations in which EPA regulations do limit air pollution from shale gas wells. For example, Professor Wiseman explains that even “minor” gas operations may be subject to federal regulations if these operations are located in “nonattainment” areas, which are locations that currently exceed the federal NAAQS and are thus subject to more stringent requirements. Additionally, new gas compressor stations and existing stations that increase their hourly pollutant emissions are subject to technology requirements under EPA’s New Source Performance Standards (NSPS). EPA recently promulgated new NSPS for VOCs emitted from fractured and re-fractured wells, which will eventually require drillers to use green completions.

Nevertheless, the limitations of federal regulations mean that state law may often provide the only applicable air quality controls for many shale gas wells. Professor Wiseman writes that New York and Colorado currently have the strongest regulatory regimes in this respect, but that many states lack regulations to control or even monitor air pollution from shale gas wells.

As can be seen in the following table, air quality regulations for shale gas development in the five states – Texas, Louisiana, Oklahoma, Arkansas, and Pennsylvania – with the highest levels of shale gas production in 2010 (the most recent year for which data from the U.S. Energy Information Administration is available), vary widely. These regulations generally apply to both shale gas wells and conventionally-drilled natural gas wells.

The table, which draws from Professor Wiseman’s paper and research conducted by Resources for the Future (in which Professor Wiseman is also involved), shows that four of these five states regulate gas venting to at least some extent, such as by requiring flaring if emissions reach certain levels. However, Texas includes numerous exceptions to these requirements and Pennsylvania’s regulation prohibits venting only in cases “when the venting produces a hazard to the public health and safety” (e.g., due to a risk of explosion).

Most of these states also regulate emissions from other areas of the shale gas development process, though these regulations may be circumscribed in scope or, as in Pennsylvania, subject to significant exceptions.

Given that shale gas development is a relatively recent phenomenon, its air quality impacts—and the effects of specific regulations—are still uncertain. Thus, one key area of regulation is the extent to which states require monitoring and reporting, which can help policymakers better understand air quality impacts and regulatory outcomes. Monitoring and reporting are also critically important for compliance enforcement. Louisiana currently requires monitoring and recordkeeping for flaring and venting of natural gas and glycol dehydrators. Other states, such as Arkansas and Pennsylvania have conducted surveys of air pollutant emissions from shale gas development, which could help improve future efforts. Texas has implemented an air quality monitoring program in the Barnett Shale Area.

Understanding and Improving Regulation of Shale Gas Development

Whether these current regulations will ensure that air quality remains at an acceptable level is a key question for policymakers moving forward and for states that have yet to develop their own approaches to shale gas regulation. On Wednesday, December 5, we will address these issues explicitly as we discuss current local, state, and federal approaches to regulating shale gas’ air impacts; regulation of other shale gas impacts, including on water quality; and the implications of these current approaches for future regulatory regimes through Professor Wiseman’s webinar on “Understanding and Improving Regulation of Shale Gas Development.”

[1]Fracking entails high pressure underground injection of large volumes of water mixed with chemicals, sand, and other substances, a portion of which returns to the surface as “flowback.” “Produced water” is naturally-occurring subsurface water, which also flows out of wells and may contain dissolved solids, metals, organic and inorganic compounds, and naturally-occurring radioactive material.